Cambrex riding high on demand for Western innovator APIs
For the full year 2016, Cambrex Corporation announced sales of $492m (€460m), up 13% year-on-year. This included a 17% increase in sales from innovator drug active pharmaceutical ingredients (APIs), representing $330m in revenues, offsetting flat generic API sales.
Discussing these results with stakeholders Friday, CEO Steven Klosk said innovator drugmakers are showing a strong preference for Western suppliers, claiming firms like Cambrex – with sites in Charles City (Iowa, US), Karlskoga (Sweden) and Paullo (Milan, Italy) – offer “excellent regulatory records and world-class quality systems.”
Along with “a robust and growing clinical development pipeline, with strong year-over-year increases in the number of Phase II and III small molecule products,” and the continued reduction in pharma’s in-house small molecule manufacturing footprint, Cambrex is well-placed to continue growing.
“There is limited third-party large-scale GMP capacity in the US to fulfil this demand. We believe the capacity utilization in Europe is exhibiting similar characteristics,” he told investors. “Our strategy is aligned with these positive market dynamics and should allow us to continue to benefit from them.”
As such, full-year 2017 net revenues are expected to grow in the high single-digit to low double-digit percentage range.
Targeting late-stage innovator candidates
During the conference call, Klosk said the firm was strengthened by two new projects during Q4, pushing Cambrex’ active late-stage clinical projects to 16 active and placing the firm in good stead for the coming year.
“If the clinical projects within this group are approved for commercial sale, or when we successfully validate the manufacturing process for a product that is already commercial, we expect to negotiate supply agreements to provide commercial volumes,” he told stakeholders.
He added industry data shows 60% to 70% of the Phase III products are likely to be approved, with drug going into registration being much higher, while only around 25% of Phase II projects are commercially successful.
So “we're definitely aggressive about winning both the late-stage and the commercial,” he said, for the “obvious reasons” of scale-up and lengthy contract extensions.
Capacity expansions
Cambrex has also completed a number of capacity expansions and acquisitions which Klosk said will further reinforce the firm’s position.
“We continue to expect utilisation of our large scale expansion in Charles City, Iowa to ramp up steadily throughout 2017,” he said. “We recently added large scale capacity at our Swedish facility and are currently implementing a smaller investment to increase 2017 capacity within the existing footprint at Charles City.”
Furthermore, the firm acquired PharmaCore last year for $25m, and Klosk said Cambrex the integration of the North Carolina-based controlled API maker will be “the next large capacity expansion,” expected to begin later this year.
